Cosco-Capital-Digital-Annual-Report
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Table of Contents Cosco Calling 4 Corporate Overview 6 Timeline 8 Message from the Chairman 10 Message from the President 12 About the Cover Financial Highlights 14 Cosco Capital 16 Business Units Summary 18 Puregold 20 S&R 22 Store Network 24 Office Warehouse 26 Wine and Spirits 27 Elimac Prime Holding, Inc. 28 Fertuna Holdings Corp. 29 Patagonia Holdings Corp. 29 Nation Realty, Inc. 30 NE Pacific Shopping Centers Corp. 31 Pure Petroleum Corp. 32 Enriching Communities As One Alcorn Petroleum and Minerals Corp. 33 Over the years Cosco Capital has built a solid Cosco Cares 34 reputation enriching communities nationwide. Sustainability Efforts 36 From well-stocked grocery aisles, community malls and micro-entrepreneur support, delightful Cosco Credibility 42 baked goods and a bevy of beverages, corporate Board of Directors Group 44 office supplies to sustainable initiatives for a Board of Directors Individual 46 preserved and protected planet – Cosco has Awards and Recognition 51 consistently moved, serviced, and delighted a wide Financial Statements 54 range of people, with an eye to reach more. We serve as one. We advance as one. Annual Report 2019 3 Cosco Calling 4 Annual Report 2019 Annual Report 2019 5 Corporate Overview In 2019, Cosco Capital, Inc. further established its status as one of the fastest Consists of our three subsidiaries: Montosco, Inc, Meritus Prime growing conglomerates in the Philippines. Liquor Distributions, Inc., and Premier Wines and Spirits, Inc. Together, we remain the leading importer of high-quality international Distribution alcohol brands to local shores—brands such as Patron Tequila, Johnnie Walker, Jack Daniels, Jose Cuervo, Chivas Regal, Absolut We are comprised of five core business units: Vodka, Jagermeister, and Alfonso Brandy. Comprised of our flagship grocery businesses Puregold and S&R Includes six subsidiaries: Ellimac Prime Holdings, Inc., Fertuna Grocery with 378 and 18 nationwide stores, respectively. Puregold is the Real Holdings Corp., Patagonia Holdings Corp., Nation Realty, Inc., country’s second-largest supermarket chain, while S&R is currently NE Pacific Shopping Centers Corp., and Pure Petroleum Corp. Retail the country’s largest premier chain of warehouse shopping clubs. Estate Together, we own 55 commercial properties, 1 of which was In 2019, we opened 28 new Puregold branches, two new S&R acquired in 2019. Additionally, in the past year we opened two warehouse clubs, and one S&R quick service restaurant. new community malls in Aurora, Quezon and Bayawan, Negros Oriental. Specialty Driven solely by Office Warehouse, Inc., which aims to offer a wide range of office and school supplies at the lowest prices This is composed solely of Alcorn Petroleum and Minerals Retail possible. In 2019, we opened four new branches nationwide and Mining Corporation, Cosco’s subsidiary devoted to explore and develop our saw astounding growth driven by aggressive store expansion and interest in oil and mining business activities. Our business interests enhanced product offerings. in this area extends primarily to the waters of Palawan. Each has performed very well, bringing in consolidated revenue of P166.06 billion for 2019. As we enter a new decade, Cosco Capital is investing P3.6 billion in capital expenditures for 2020. We aim to not only sustain our company’s existing growth, but to surpass it as we aim to realize our full potential. Annual Report 2019 7 Timeline 1988 1998 1999 2001 2004 2008 2009 2010 2011 Cosco Capital Retail Liquor Retail Retail Retail Retail Retail Retail On January 19, On September Distribution Puregold builds Puregold launches Puregold is recognized by Puregold becomes Now operating 62 stores, Puregold opens Alcorn Gold 8, Puregold two additional Tindahan ni Aling Reader’s Digest Asia as the second-largest Puregold launches another a record 38 new Resources Price Club was First shipment of hypermarket Puring, its flagship the Most Trusted Brand in hypermarket and format called Puregold Extra. stores. All in all, Corporation was incorporated and Alfonso Brandy stores in Manila loyalty program. the supermarket category. supermarket retailer the retailer now incorporated and registered with was shipped to the and Parañaque in the Philippines. Retail has a total of 100 registered with the SEC. Philippines from City. branches. Retail Puregold is recognized by the Securities Spain. Real Estate and Exchange Retail Puregold launches a Retail Asia Pacific as one of the Liquor Commission (SEC). smaller-scale format Pure Petroleum, Inc. top 500 retailers in the region. In December, called Puregold Jr. builds a fuel terminal Distribution Puregold Supermarket. facility inside the Montosco introduces opened its first Subic Bay Freeport Liquor Distribution Alfonso Light to the hypermarket store in Zone, which became Meritus Prime Distributions market. Mandaluyong City. operational in becomes the exclusive December 2012. Philippine distributor of Beam Global Spirits & Wine. 2019 2018 2016 2014 2013 2012 Retail Retail Liquor Distribution Real Estate Cosco Capital Retail By year-end, Puregold operates a total of 434 Puregold sells In collaboration with In March, Cosco Capital Alcorn Gold Resources Corporation renames itself to Puregold acquires stores. This consists of 229 hypermarkets, Lawson, Inc. all the renowned Spanish acquired the 10-hectare NE Cosco Capital, and becomes an official holdings company. S&R Membership 102 supermarkets, 28 extra, 19 minimarts, its shares in PG winery Bodegas Pacific Mall in Nueva Ecija. Shopping, with six 18 S&R warehouse clubs, and 38 S&R-QSRs. Lawson, Inc. Williams & Humbert, new warehouse Meritus launches Cosco Capital shopping clubs. Cosco Capital Office Warehouse Liquor Alhambra Solera On April 12, the Lucio L. Co Group purchased P74.8 billion Brandy. On June 11, Cosco Capital worth of shares of Cosco Capital and its numerous holdings. Retail Office Warehouse ends the year with 89 retail Distribution formally transferred its oil doors, with 67 in Metro Manila and 22 in and mining interests to Puregold opens provincial areas. Montosco APMC. Cosco Capital 31 new Puregold becomes the stores, and acquires On July 5, SEC approved the registration of Alcorn exclusive importer the Gant Group of Petroleum and Minerals Corporation (APMC), a wholly- Real Estate and distributor of Retail Companies (Parco Gilbey’s and Island owned subsidiary of Cosco Capital, Inc. All in all, the real estate group has over 34 supermarkets) with Mixers in the S&R opens its first four commercial buildings and 277,000 sqm of 19 new stores. Philippines. quick-service restaurants gross leasable spaces across NCR, Luzon, (QSR). Liquor Distribution and the Visayas, 97 percent of which are Cosco Capital acquires Montosco Inc, Premiere Wine occupied. & Spirits Inc and Meritus Prime Distributions Inc. Real Estate Retail In September, Fertuna Holdings Puregold partners with PG Retail Corporation opened Lawson, Inc. to build and Company E and Gant Group of Companies the 6.5-hectare operate a chain of Lawson merge with Puregold. Harbor Point Mall in convenience stores. Subic Bay Freeport Zone. Oil & Mining Office Warehouse On July 5, Alcorn Petroleum and Minerals Corporation was Cosco Capital buys Office incorporated to explore and develop Cosco Capital’s oil Warehouse with 46 stores. and mining business activities. 8 Annual Report 2019 Annual Report 2019 9 Message From the Chairman At Cosco Capital, our foremost commitment is to deliver superior business returns for all our partners and stakeholders while enriching our customers’ lives. This is why we are thrilled to look back on 2019, a major year for our company’s growth—both in financial profits and in diversifying our services to better serve the Filipino market. As a new decade dawns, we face many uphill challenges, most notably the Covid-19 pandemic. Despite this difficulty, we remain committed to all our people: our employees, stakeholders, and all our customers. Cosco will meet all challenges head on, committed to sustaining our growth and finding ways to serve. We look forward to meeting our commitments and exceeding our dreams working shoulder to shoulder with the whole Cosco community. Lucio L. Co Chairman 10 Annual Report 2019 Annual Report 2019 11 Financial Performance of the various Message From business segments. Puregold and S&R turned in a record profitability, reporting a Overall, Cosco Capital reported a consolidated net income after tax of P6.8 billion or an increase of core net income of P9.320 billion, the President 9.2% from P6.2 billion in 2018. an increase of 14.8% over 2018 of The Liquor Distribution business, on the other hand, reported a P8.120 billion. Including the one- net income after tax of P1.2 billion from P738.0 million in 2018 or time gain on sale of Liquigaz, total an increase of 64.2%. net income in 2019, amounted to P15.4 billion. Indeed, it was a Our Specialty Retail vehicle reported a record net income of P97.0 banner year for Cosco Capital, Inc. million from P65.58 million in 2018, an increase of 48%. The following are the highlights of business development. 1. Puregold opened 28 new stores vs. a target of 25: six in Metro Manila; 13 in Luzon; eight in Visayas and one in Mindanao. 2. S&R opened two new warehouses: Lipa City and Libis, Quezon City. Thus, the end-of-year store count is 378 Puregold, 18 S&R, and 38 QSR, or a total of 434 stores nationwide. 3. Real estate commercial leasing opened two community malls located in Maria Aurora, Aurora and Bayawan Negros Oriental. Both have Puregold as an anchor tenant. We also acquired one commercial lot located at Barotac, Nuevo, Iloilo City. 4. Office Warehouse opened four new stores bringing its total store count to 89, 65 in Metro Manila and 24 in Luzon. This is being written while the country is in the midst of a long On your behalf and that of lockdown.